Automech Akhbar El Yom 2009 Provides Access to 1.5 billion Customers in the MENA Market

The Middle East and North Africa (MENA) region is a fast-growing market for the automobile industry. Automobiles, automotive parts, accessories and components represent a multi million-dollar trade in MENA countries which have the highest cars-per-household ratio in the world. The automotive aftermarket segment in the region is valued at over US$11billion per year. There are more than 58 million vehicles in the Gulf Cooperation Council (GCC) states and the number is rising at an average rate of 10% as per the latest official figures.

The automobile market in the MENA region is expected to grow along with other sectors of the economy, which is experiencing significant growth rates. Throughout the Middle East- and particularly in Egypt, the fastest growing automotive market in the MENA region- government policies are encouraging the expansion and modernization of workshops and service stations. Meanwhile, automobile users in the region prefer to use authentic parts. The main suppliers of automotive parts and maintenance equipment are U.S., Germany, Italy, and East Asian countries.

The Egyptian Automotive and the promising Opportunities:

No wonder to know that Egypt has 22 automotive assembly plants of major car brands, thanks to the lowest-all-over-the-world power prices and new government incentives for investment, in addition to customs reduction and other fiscal reforms taken recently since the new businessmen-oriented Cabinet was appointed in 2004. Egypt is not just the most populous country in the MENA region (72+million), but it also has the second largest economy after Saudi Arabia with relatively low wages, giving the Egyptian labour a competitive advantage.

The Egyptian market is the fastest growing automotive market in the Middle East and Africa. About 5 million vehicles (a quarter of the total 20 million Arab vehicles) are moving in the Egyptian streets, 32% of which are more than 17 years old. With its population of 72+ million and its central location in the MENA region, the Egyptian vehicle market is experiencing a steady increase of an average 200,000 units per year.

The increase in the number of vehicles has resulted in an increasing demand for automotive service centres with modern equipment. Investments in automotive industries in Egypt are estimated at US$ 1.5 billions. According to the OICA local vehicles production increased by 34% with total of 170,614 units in 2006. Egyptian spare parts imports are estimated at US$ 360 millions per year.

Although the domestic market for new cars is growing in the years ahead, analysts are predicting that the best investment opportunities will still be in the export-oriented automotive feeding industries. Aside from having suitable human resources and much of the necessary infrastructure, Egypt is well placed geographically to serve neighbouring and African markets. Taking the ride, the Egyptian government is planning to establish an industrial zone in 6th of October City in southern Cairo with 1 US$ billion investments within the next five years.